ING money laundering woes worsen after Bank of Italy inspections

ING was also recently caught up in the Troika Dialog laundromat involving dirty Russian money. (Bloomberg)

The Bank of Italy asked ING Groep NV to avoid any business with new clients in the country after it fell short in recent anti-money laundering checks, adding to the Dutch lender’s compliance woes.

The central bank identified shortcomings in the Amsterdam-based bank’s processes during a four-month on-site inspection in Italy that ended in January, according to a statement late Saturday. ING said separately it’s taking steps to improve processes and management of compliance risks, in line with an enhancement program announced after it paid a large fine last year.

The Dutch bank is struggling to move on from its money laundering woes, six months after paying a 775 million-euro ($878 million) fine to settle an investigation by a Dutch prosecutor into issues including money laundering and corrupt practices. The fine was one of the biggest ever levied on one of the nation’s lender, prompting the ouster of the CFO.

ING was also recently caught up in the Troika Dialog laundromat involving dirty Russian money. Hundreds of millions of euros passed through the bank’s Moscow branch as part of a money laundering scheme constructed by Troika Dialog, Trouw newspaper reported earlier this month, citing an investigation by The Organized Crime and Corruption Reporting Project. The bank reiterated at the time the new measures its taking to boost controls.

‘Serious Shortcomings’

After acknowledging “serious shortcomings” in executing due diligence policies to prevent financial crime at its Dutch unit from 2010 to 2016, Chief Executive Officer Ralph Hamers emphasized on multiple occasions that the bank had learned its lesson. Koos Timmermans, who was the chief financial officer, resigned after public discontent and the bank is on a hiring spree for compliance staff.

ING has been in Italy since 2001 with its retail bank, where it employs about 900 workers in a country where it generated 231 million euros in revenue last year, according to its annual report. Italy is part of ING’s so-called challenger markets, where ING plans to grow by being fully digital, without branches.

The Bank of Italy’s request is another blow to Hamers, whose goal is to build a single platform to serve all its retail banks in Europe. For its challenger markets, ING has built what it calls “Model Bank.” After Czech Republic became the first country to go live on this platform, ING was planning to start integrating customers in Spain, France and Italy onto the system this year.

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